Home-selling season strong as mortgage rates hit 7-month high
Alan Cleaver, "Alan Cleaver" via Flickr
Bankrate reports that fixed mortgage rates increased this week, with the 30-year fixed mortgage climbing to 3.85 percent.
"The average 15-year fixed mortgage rate climbed higher this week (3.03 percent), as did the larger jumbo 30-year fixed mortgage, jumping to 4.18 percent," according to a press release from Bankrate. "Adjustable rate mortgages were mixed, with the 3-year ARM slipping to 3.00 percent, the 5-year ARM rising to 2.82 percent, and the 7-year ARM inching up to 2.99 percent.
"Mortgage rates jumped to a 7-month high following a report of robust job growth and encouraging economic data on business investment and retail sales. The benchmark 30-year fixed mortgage rate, now at 3.85 percent, is the highest since it was 3.91 percent on Aug. 22, 2012. Positive economic news leads to higher bond yields, as evidenced by the 10-year Treasury note climbing back above the 2 percent threshold. Mortgage rates are closely related to yields on long-term government bonds, with mortgage rates following suit and moving higher also."
The last time mortgage rates were higher than 5 percent was April 2011.
Meanwhile, Re/Max reports that February's home sales and prices rose higher than a year ago: "After a decisive housing turnaround in 2012, this year looks to improve on recovering market trends. With data representing 52 metropolitan areas, the February Re/Max National Housing Report shows home sales 2.3 percent greater than February 2012 and a median price 7.0 percent higher. Still a concern is the number of available homes for sale, which continues to shrink, turning the market more favorable to sellers. Home inventory fell 29.2 percent from last year, resulting in a 4.8-month supply.
"In only the second month of the year, real estate agents are already seeing renewed consumer interest and are expecting increased traffic in the next few months. As home prices recover in 2013, more homeowners will achieve positive equity and the number of foreclosures should be reduced. The current recovery has not yet brought housing back to pre-crisis levels, but appears on its way to a more stable and sustainable environment."
"It's clear that the housing recovery is real and is moving full-speed ahead into 2013," Margaret Kelly, CEO of Re/Max, said in a statement. "Consumers recognize that we've hit the bottom, and real estate is offering some great opportunities with low prices and low interest rates. This is an attractive combination that most of us will never see again in our lifetimes."
Realtor.com says the spring homebuying season has begun early.
"(L)isting inventories increased 1.15 percent month-over-month; median age of inventory was at 98 days, a 9.26 percent decrease month-over-month; and median list prices were slightly higher month-over-month at $189,900. These numbers show that homebuyers are getting an early start on the spring season despite the fact that inventories recently hit record lows."
"As we enter the busiest time of the year for home buyers and sellers, our latest housing trend data shows just how competitive the market is with a significant national housing recovery well under way," Steve Berkowitz, chief executive officer of Move, Inc. (which runs Realtor.com) said in a statement. "Looking ahead, we can expect the amount of inventory to increase this spring along with higher list prices as sellers become more comfortable with the market conditions."